GCSE attainment entrenches pay gap for disadvantaged pupils by age 25, new EPI analysis finds

New Education Policy Institute (EPI) analysis finds that GCSE attainment casts a long shadow, entrenching the earnings gap for disadvantaged pupils from the age of 16.

The new research, part of a Nuffield Foundation-funded project, tracks the progress of students from school into the workplace. It finds that while choices made after school (such as which college or sixth form to attend) matter, they are often outweighed by the legacy of GCSE results.

Key findings: 

• Within all education routes taken after school, disadvantaged students consistently earn less than their peers. For example, male disadvantaged students who took Level 3 qualifications (e.g. A-levels/BTECs) earned, on average, £3,250 less than their non-disadvantaged peers (£21,770 v £25,020).
• Much of the earnings gap that appears to be caused by post-16 qualification choices is actually driven by GCSE results. The data suggests that without closing the gap at age 16, it becomes very difficult to close the earnings gap later through qualification choice alone.
• The earnings gap between disadvantaged and non-disadvantaged students is around £4,100 but falls by £2,000 for women and £1,500 for men after controlling for GCSE results. 

Robbie Cruikshanks, Senior Researcher at the Education Policy Institute, said: 

“Our findings reveal the stark disadvantage gap in earnings at age 25 across all qualification levels. The crucial role that GCSE attainment plays in driving these earnings gaps further highlights the need to address earlier attainment gaps in education that risk entrenching existing socio-economic disparities.

“Furthermore, we found that qualification choice has a distinct impact that is larger for disadvantaged women, indicating that women from poorer backgrounds may benefit from greater support to pursue higher level qualifications, particularly those associated with higher labour market returns. This shows we must not only narrow early attainment gaps but also dismantle the barriers to these high-return pathways for everyone.”

This analysis reviews the effect of qualification choice and prior attainment on pre-tax earnings at age 25 for male and female disadvantaged and non-disadvantaged students, covering the 2017-18 to 2020-21 tax years. This represents the latest three-year period for which earnings data is available in the LEO dataset.  Earnings are averaged across this period, with all figures expressed in 2020-21 prices using HM Treasury GDP deflators. 

Sector Reaction

Sarah Hannafin at school leaders’ union NAHT, said:

“The stubborn disadvantage gap we see at GCSE may reflect everything from the impacts of poverty and Covid, to a decade of government failure to invest sufficiently in education and services like social care and mental health which can offer vital help to families. 

“This is compounded by a curriculum and qualification system which does not do enough to meet the needs of all students and take account of the different contexts and circumstances young people are navigating.

“The recognition in the curriculum and assessment review that the curriculum is overloaded, and that GCSE exam volume should be reduced by 10%, is a small but promising step towards better meeting the needs of pupils from disadvantaged backgrounds and those with additional needs. 

“Removing the restrictions of the EBacc and allowing more breadth and meaningful choice for students, as well as introducing more flexibility around the requirement for endless dispiriting maths and English resits, should also help.

“To better assess what students know and can do, however, we would have liked to have seen reintroduction of more non-exam and project-based assessments to better assess what students know and can do, irrespective of their background. There must also be a recognition of the equal value of vocational and technical qualifications for a wide range of students and these must count in performance measures.

“It’s also important to remember that while GCSEs are important, they need not define young people’s career prospects, and for many a fulfilling future vocation is about more than just earnings.”